FT: Lukoil plans to sell its Bulgarian refinery to a Qatari-British consortium

The Russian oil company "Lukoil" seems to have found someone to sell its refinery in Bulgaria - its biggest asset in the Balkans. The proposal is for a Qatari-British consortium to acquire the Bulgarian refinery by the end of the year, the Financial Times reports. This is done with the idea of ​​showing the weakening of Moscow's influence on energy supplies in South-Eastern Europe. Lukoil is now selling its majority stake in the refinery near Burgas, according to a letter from the group to Russian President Vladimir Putin's office seen by the Financial Times.

Putin must approve the deal. Lukoil has chosen a consortium made up of Oryx Global, controlled by Qatari businessman Ghanim Bin Saad Al Saad, and London-based commodities trading house DL Hudson as the preferred buyer and said it wanted to close the deal before the end of the year. Oryx declined to comment. DL Hudson did not respond to requests for comment either.

An EU-wide ban on Russian oil imports following Moscow's full-scale invasion of Ukraine in 2022 has made it increasingly difficult for Lukoil to operate in Bulgaria. An EU and NATO member, Bulgaria is also putting pressure on Lukoil to leave the country. Last year it hit the company with a 60 percent tax on profits in an attempt to drive out its owners.

At that time, the export of products based on Russian crude oil from Lukoil Neftohim Burgas was also prohibited. Bulgaria, which was friendly to Russia before the invasion, sent important ammunition and weapons to Kiev and even diesel from the Lukoil refinery during the first part of the war. Relations between the two countries were further strained after accusations that the Russians tried to sabotage Bulgarian weapons facilities, the publication recalls.

Emilian Gebrev, whose company Emco produces much of Bulgaria's production of Soviet-standard bullets and tank shells shipped to Kiev, told the FT last year that Russian saboteurs were actively attacking his factories and warehouses. Some commentators say the Bulgarians should have put more pressure on Lukoil to leave earlier because of security risks.

Ruslan Stefanov, program director of the Center for the Study of Democracy said: “This is clearly the biggest risk to economic security in Europe and NATO. “What if EDF in France, Eni in Italy or BP in the UK were owned by Russia? Would it still have taken 1,000 days of bombing Ukraine to act?” he asked.

The latest round of applicants for the Lukoil refinery also included Socar, Azerbaijan's state energy company, KazMunayGas, Kazakhstan's state energy group, and Turkish oil group Opet, according to the letter sent to Putin's office. Socar, KazMunayGas and Opet did not respond to requests for comment for the FT.

In all, at least half a dozen groups have expressed interest in buying the company, according to two people familiar with the matter, the publication said.